Category: US Dollar
The analysis published under this category are as follows.
Wednesday, April 11, 2007
Currency Charts Analysis & Strategy: EURUSD, AUDCAD and USDJPY / Currencies / US Dollar
By: Ashraf_Laidi
The dollar is little changed after the release of FOMC minutes, which shed more detail on the Fed's decision to downgrade its view on growth and housing, but also stepped up its inflation vigilance. The minutes noted that: "Most participants continued to expect that core inflation would slow gradually, but the recent readings on inflation and productivity growth, along with higher energy prices, had increased the odds that inflation would fail to moderate as expected" . Such a statement affirms that inflation remains the principal risk to the Fed's economic assessment even as it witnesses the gradual data deterioration of the US economy.
The minutes will help provide some support to the greenback until Thursday's data releases.
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Thursday, April 05, 2007
Euro Dominates At Expense of Gloomy US Dollar Ahead of Non Farm Payrolls / Currencies / US Dollar
By: Ashraf_Laidi
The dollar drops to fresh 2-year lows against the euro, on the combination of pre-job reports jitters and pre-holiday thinning trading volumes. The slight increase in US weekly jobless claims rose from 310K to 321K is firmly placing the focus on tomorrow's jobs reports, which may be expected to deliver further disappointment following the employment components of the services and manufacturing ISM. Today's FX moves remain largely euro specific as the currency rallies from all cylinders, including EURGBP exploiting the Bank of England's decision to hold rates unchanged.Read full article... Read full article...
Thursday, March 29, 2007
Fed Jeopardizes US Dollar as it Neglects its Mandate / Economics / US Dollar
By: Axel_Merk
The U.S. dollar collapsed to two-year lows against the euro as the Federal Reserve (Fed) takes its focus away from fighting inflation. The Fed has a dual mandate: price stability as well as full employment. With unemployment hovering near historic lows, why does the Fed neglect its mandate to fight inflation, thereby jeopardizing the dollar?
Inflation has been creeping up throughout the economy, now showing up even in the "core inflation" statistics the Fed pays particular attention to. At the same time, the signs of an economic slowdown become ever more apparent. Fighting a slowing economy versus fighting rising inflation require diametrically opposed monetary policies. Given the low unemployment rate, rather serious reasons must exist for the Fed to deviate from its mandate to fight inflation. It is the Fed's role to take away the punchbowl when excesses are created in the economy. Over the past decade, the Fed has lost focus of its mission, blinded by misunderstood dynamics introduced by the internet and globalization. Let us examine why the Fed is shifting its focus to growth.
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Wednesday, March 21, 2007
US Dollar Forecast - Turn to Bernanke's February Testimony for Clues / Currencies / US Dollar
By: Ashraf_Laidi
Recall that Fed Chairman Bernanke issued a less upbeat speech in last month's Congressional testimony, following a more optimistic January FOMC statement. Since the data have been markedly weaker since February, the Fed has no choice but to tone down the optimism in the phrase indicating "recent indicators have suggested somewhat firmer economic growth."
The dollar gains ground against the yen and European currencies, with the latter under pressure primarily due a surprisingly dovish release of the minutes from this week's Bank of England rate decision showing 1 vote calling for a rate cut against eight members voting for no change. Markets were pricing a 7-2 decision with the 2 members calling for a rate hike.
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Tuesday, March 13, 2007
Forex Forecast - US Retail Sales Weakness means more Unwinding in the Yen Carry Trade / Currencies / US Dollar
By: Ashraf_Laidi
Retail sales grew by less than expected at 0.1% in February after a flat showing in January, while sales ex-autos fell 0.1% from 0.2% in January. This weak report coupled with the downward revision in the January core sales should further drag on US Q1 GDP . We're not sure about the validity of claims by some economists attributing the weakness to cold weather, when February is a month known for its cold temperatures. The decline in sales was broad-based, even when excluding autos, gasoline and building materials.
The weakness in retail sales comprises an economic argument to trigger further unwinding in the yen carry trade, in which point it will extend to other dollar pairs. Unlike the carry trade unwinding of two weeks ago, which was largely market-based and only limited to low yielding currencies, today's report triggers an all round sell-off in the US dollar, lifting EURUSD above 1.3220 and GBPUSD above 1.9340.
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Thursday, March 08, 2007
Currency Forecasts - USD/JPY and GBP/EUR - Short-term Dollar rally expected / Currencies / US Dollar
By: Ashraf_Laidi
Wednesdays release of a weaker than expected ADP report (forecast for private employment payrolls) showing the net creation of 57K jobs in February, suggests that Friday's release of February non-farm payrolls may come in well below consensus estimates of 100K.
The ADP report has been generally effective in predicting whether non-farm payrolls would come in above or below consensus forecasts, rather than predicting the actual figure.
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Tuesday, February 27, 2007
Zero Degrees of US Dollar Seperation / Currencies / US Dollar
By: Jim_Willie_CB
The last several months have provided a keen lesson in currency defense by a nation which has been written off in many circles as owning a dead and hopeless currency. Some key inter-related feedback loops have been on my radar, each vitally important and changing, which underscore in my viewpoint how major markets are inseparable, each inter-connected, and integrally important if the USDollar is to avoid a much deserved crash. A quip of mine at a conference one year ago centered on my claim that the USDollar was backed by the full force of the US Military.
While true in some respect, the actual defense day to day entails a green triangle not to be confused by the iron triangle which fortifies the Pentagon funding, namely the US Congress, the defense contractors, and the lobbyists when grease the funding wheels. Complementing this death grip which has contributed over decades to do irreparable harm to the USDollar, the green triangle consists of holding down gold in a straight jacket, and holding down crude oil in a giant clamp. Never stated is its purpose to reinforce the USDollar from its implied inverse leverage device as hedge funds run for cover. The greenback and gold shine in opposite directions. The greenback and crude oil flow in opposite directions. Goldman Sachs has been at the controls on most of the master machinery.
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Wednesday, February 07, 2007
The US Dollar will Crash during 2007 due to $8.6 trillion debt / Currencies / US Dollar
By: Mike_Whitney
“Whatever future developments may prove to be, my best guess is that the US will continue to maintain a facade of Constitutional government and drift along until financial bankruptcy overtakes it.” Chalmers Johnson, “Empire V. Democracy: Why Nemesis is at our Door”
Every time a US Dollar is traded, a check is issued on an account that is overdrawn by $8.6 trillion. (That is the present size of the national debt) It is, without question, the biggest swindle in history. Flimsy sheets of faded-green scrip are eagerly exchanged for costly goods and services without any regard for the real value of the currency.
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Friday, January 26, 2007
Currency Market Forecast - Further Aussie Dollar (AUD) Unwinding Ahead due to softer Inflation / Currencies / US Dollar
By: Ashraf_Laidi
This week's softer than expected consumer inflation figures from Australia have eroded chances of a February rate hike and may have finally concluded the 4 ½ year old tightening cycle adopted by the Reserve Bank of Australia, which lifted interest rates from 4.25% to 6.25%. The headline CPI slowed to 3.3% in y/y in Q4 from 3.9% in Q3, undershooting expectations of a 3.6% reading. Although the core CPI (excluding volatile items) edged up to 2.7% from 2.6%, the seasonally adjusted weighted median CPI slipped to 3.0% from 3.2%. Markets were especially caught off guard by the 0.1% decline q/q, which was the first decrease in 8 years. The soft CPI report was clearly a result of falling energy and commodity prices, which triggered a 12.4% drop in gasoline costs and a 5.2% in fruit prices. But the report was instrumental in dampening probabilities of a February rate hike from as much as 80% to less than 15%.Read full article... Read full article...